United States must resume trade
Anyone who hopes the Biden administration will pursue international trade policies to counter the protectionism of the Trump administration should be deeply disappointed. President BidenJoe BidenCruz tears up his GOP colleagues who are “complicit” in Biden’s spending program. has left Trump tariffs in place, and he shows no sign of wanting to pursue new trade deals, having enabled his trade promotion authority – the ability to make deals quicker than congressional delegates to a president – will expire on July 1.
Indeed, on July 28, Biden doubled down on the extension of Trump’s protectionist agenda by proposing a “Buy American” rule.
At first glance, it may seem magnanimous to try to preserve American jobs by requiring government procurement to prioritize domestic sources. And it may seem good to be economically independent from foreign countries. Yet Biden’s trade agenda can only go so far in benefiting American workers. Ending the trade war with China and opening more markets to American consumers would do much more.
Inflation, which hasn’t been a concern for years, has suddenly returned to the news, with consumer prices rising at worrying rates in recent months – gasoline prices up 45%, new cars up 45%, clothing up 4.9%, natural gas utilities up 15.6%, restaurants up 4.2% – for a 5.4% inflation rate from June 2020 to June 2021.
With protectionist policies remaining in place, American consumers are not being afforded the opportunity to import affordable products as we could in the past. In times of economic hardship, as we seek to recover from the pandemic, American consumers are harmed by protectionist policies.
Meanwhile, other countries around the world are quick to ignore America and forge new business partnerships to benefit their economies and come out of the pandemic on a stronger long-term economic foundation. Two major trade deals were concluded during the Trump era: the 15 nations Comprehensive regional economic partnership (RCEP), which is arguably the largest free trade agreement in history and includes China and the 11 nations Comprehensive and progressive trans-Pacific partnership agreement (CPTPP). Between RCEP and CPTPP, there are seven overlapping countries. Neither includes the United States.
At present, the United States has free trade agreements with only 20 countries, and this set of countries does not include India, one of the fastest growing economies in the world with a 10% projected growth rate for this year. On the African continent, which is expected to experience growth rates of About 5%, post-pandemic, the United States also has only one free trade agreement—with Morocco, with which we have a unique relationship, because this country was the first to recognize the United States as an independent nation.
All this to say that our list of free trade partnerships is too exclusive. American workers are not profiting from providing products and services to businesses and consumers in these rapidly growing international economies as they should and as they should. was shown they do so where free trade agreements exist. As a result, China and other economic powers are meeting the needs while the US government cripples US businesses.
Highlighting this idea, the The International Monetary Fund has expressed concern on current US trade policy, writing on July 1 “Trade restrictions and tariff increases should be reversed, and the “Buy American” provisions should be narrowly circumscribed and made compatible with the United States. international obligations of the United States. This would underscore the United States’ traditional commitment to an open, stable and transparent international trade regime. “
Traditionally, American innovators have supported an international economy that is open, accessible and welcoming to new products and services. At the same time, our trade relationships have allowed our influence to transcend mere economics to include American values and human rights.
As the global community becomes more united, it is essential that the Biden administration re-engages our country in international trade with a long-term vision that benefits American workers and consumers.
Kent Kaiser, Ph.D., is Executive Director of the Trade Alliance to Promote Prosperity. More information is available at www.promote-trade.org.